Rents now eating up more than half of earnings in 17 London boroughs

A growing number of people renting in the private sector in London are seeing the cost of their home eating up more than half of their earnings, Labour warned today.

Official figures show that average weekly rents are more than 50 per cent of average local wages in 17 boroughs across London, from Kensington and Chelsea to Haringey, Merton and Barnet.

“This is more evidence of just how desperate London’s housing crisis has become,” said shadow London minister Sadiq Khan. “Housing is by far the biggest contributor to the cost of living crisis in London.”

The figures compiled by the Commons Library compared average weekly rents in each borough to the average local weekly earnings.

In Kensington and Chelsea, average weekly rents were a staggering 73 per cent of local wages, £605 out of £826, 71 per cent in Westminster, £524 out of £737, and 51 per cent across the capital — £338 out of £658 — which is believed to be the first time it has gone over the half-way mark.

The analysis also showed that it is not just affluent parts of London where rents account for such a huge chunk of people’s incomes. In Barnet, Brent, Hounslow, Hackney and Wandsworth it was 55 per cent, in Haringey, Southwark and Lambeth it was 53 per cent, while in Ealing, Islington and Tower Hamlets 56 per cent. For Hammersmith and Fulham, the figure was 59 per cent, Camden 64 per cent and Merton and Richmond 54 per cent.

The figures, published in December, were for rents for the 12 months to the end of September 2013 and for full-time local earnings as of April last year. They do not include renters of social housing but they do include the incomes of people with mortgages.

They were published just days after London Labour MPs Heidi Alexander, Meg Hillier and Diane Abbott warned that property prices were now so high in the capital that they could not afford to buy a family house, or in some cases a flat, in their constituencies.

But Housing Minister Kris Hopkins disputed Labour’s claims.

He insisted: “Latest figures show rents are actually falling in real terms, both in London and across the country.

“But this Government wants a bigger and better rental market. That’s why we’ve introduced the £1 billion Build to Rent fund, which has already identified forty five potential schemes, alongside £10 billion of Government-backed guarantees to encourage more institutional investment in the sector.”